A LOW forward PE does NOT make Micron CHEAP.

I keep hearing it over and over. Micron is trading at a forward PE of 10.

This must be a buy right?

That’s not how it works.

A low PE in the memory sector usually means earnings are temporarily inflated from a peak cycle.

If anything, it could mean the exact opposite.

And there are many many more examples of companies and situations in which the PE does not tell the whole story.

Wanna learn about it?

Check my article on how to use the PE ratio.